“Without an effort to attract more diverse talent a firm could last for 1.5 generations or a few months,” he said.
How can advisors avoid these problems?
Tibergien said it is important for the advisory industry to become the “the industry of choice.” To do that, advisor executives should look at their firms and think of how they can encourage employees with better compensation and extended opportunities to grow professionally. They should consider how they can help employees grow in ways they hadn’t previously considered, he added.
At the same time, owners need to realize that coming generations of potential clients will not only inherit trillions of dollars, but that they “will also generate their own wealth,” he said.
He said 25 years ago advisors focused on investments, but now they need to pay more attention to developing clients and the employees who will help them reach goals.
That all means that the industry itself must become younger. The age demographics of the industry “are the most disconcerting,” he added.
The industry’s trends require each firm to look at itself and ask tough questions: “What are we doing to replace ourself and what are we doing to reach critical mass?” he asked.
Tibergien argued that some firms today don’t have redundancy protection; if the leader of the firm or other key personnel of the firm died, there would be no one with the experience to run things effectively. That happens in part, he said, because the owner or owners of the firm don’t have confidence in their workers.
In that case, Tibergien cautioned, the firm’s future is at risk.